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Consumer’s thoughts about and willingness to pay for traffic-light labeled food and financial products

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  • Drescher, Larissa S.
  • Stephan, Marette
  • Roosen, Jutta

Abstract

Recently, the stakeholders in the financial industry picked up the idea used in the food sector to label products with traffic-lights. Traffic-lights are not undisputable in either sector. The goal of this paper is to analyze consumer thoughts about this labeling type. Moreover, using the results of a split sample choice experiment the impact of traffic-light labeling on food and financial product purchases is evaluated. It shows that while consumers believe that traffic-lights are helpful in evaluating the risks and benefits associated with (food and financial) products, support for traffic-lights is higher in the food sample. On financial products, consumers’ associate simplicity with traffic-lights, but doubt that they increase the credibility of products. Results of a mixed-logit estimation indicate that traffic-lights affect consumers’ purchases of both product groups. The low-fat attribute has no significant impact on food choices without traffic-lights, but has a positive impact on choices once signalled with a traffic-light label. Consumer evaluate products carrying an organic product label positively, but if the product is additionally labeled with a traffic-light, evaluation becomes negative hinting towards a substitution effect between the organic and the TL label. Considering financial products, traffic-lights lead to a halo-effect for the variance of returns. When no traffic-lights are on the product, consumer chose a product with a high variance of returns less often but more often if the product is labelled with a traffic-light.

Suggested Citation

  • Drescher, Larissa S. & Stephan, Marette & Roosen, Jutta, 2012. "Consumer’s thoughts about and willingness to pay for traffic-light labeled food and financial products," 2012 AAEA/EAAE Food Environment Symposium 123200, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaeafe:123200
    DOI: 10.22004/ag.econ.123200
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    References listed on IDEAS

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    1. Gunne Grankvist & Ulf Dahlstrand & Anders Biel, 2004. "The Impact of Environmental Labelling on Consumer Preference: Negative vs. Positive Labels," Journal of Consumer Policy, Springer, vol. 27(2), pages 213-230, June.
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    5. Lusk, Jayson L. & Roosen, Jutta & Shogren, Jason (ed.), 2011. "The Oxford Handbook of the Economics of Food Consumption and Policy," OUP Catalogue, Oxford University Press, number 9780199569441.
    6. Drescher, Larissa S. & Marette, Stephan & Roosen, Jutta, 2011. "Consumer Acceptance of Traffic-light Labelling on Food vs. Financial Products," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114431, European Association of Agricultural Economists.
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    Keywords

    Food Consumption/Nutrition/Food Safety;

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